LATAM Weekly News
19th May 2021
It’s been a politically charged week in Latin American mining. Let’s take a look at what’s been happening.
Firstly, there are BHP’s woes at its Escondida and Spence copper mines in Chile. 97% of workers voted to reject the company’s contract offer, with those workers coming from the Integrated Operations Centre that runs much of the work at both mines. The parties are now in a five-day government mediation period, which could be extended for another five days, and BHP has said it remains optimistic about the potential for the process to resolve the dispute. However, once those mediation options run out, the prospect of a strike looms. This would grind cathode and concentrator operations at both mines virtually to a halt – a disaster in times of sky-high copper prices.
Then there’s the political status of 42% of the world’s copper supply, which comes from Chile and Peru. Chile’s proposal to increase taxes on copper mining, based on the prevailing commodity price, has been approved by the lower house as part of a huge effort to rewrite the Pinochet-era constitution, although the bill is likely to be watered down in the upper house. This adds an additional element of uncertainty, however, as it is not clear which parts of the bill will be amended and which will stand. It’s not just the taxes, either – proposals for tightening environmental and social regulations are being made as part of the new constitution.
In Peru, Pedro Castillo, the left-wing presidential candidate currently leading in the polls (although we’ve heard feedback from those on the ground saying he’s unlikely to win a runoff), has essentially copied Chile’s plan. He’s also gone back forth on the topic of nationalising some mines – it was generally thought he might, then he said he probably wouldn’t, now it seems he’s at least going to nationalise a gas field. But if he’s elected (and that’s still a very big ‘if’), he will face a fractured and rambunctious congress, so he might not be able to put his ideas in motion too easily. And back in Chile, many large operators have stability contracts that will at least see them through the reform process, so the immediate outlook is not too bleak for existing operations.
A lot remains to be seen in the coming months in Latin America, and the region has of course always presented a bit of uncertainty for investors, balanced by major rewards. Uncertainty does seem to be at something of a high right now, however, which is partially driving the same highs in the copper price. There was a bit of a dip last week, but prices seem unlikely to tumble any time soon.
Around the Traps
Huge news for Canada-based Bolivian silver explorer, New Pacific Metals (TSX:NUAG, OTCQX:NUPMF), who have announced that they will be listing on the NYSE under the symbol “NEWP”. CEO and Director, Dr. Mark Cruise, stated: “We are confident that this listing will enhance the Company’s visibility and liquidity as we work to expand our investor base and continue to advance our flag-ship Silver Sand Project to create shareholder value.” You can read the news release here.
Riverside Resources (TSXV:RRI, OTCQB:RVSDF, FSE:5YY) has a news release hot off the press with news that they have recovered the Cuarentas gold project from Hochschild, after Hochschild completed exploration work including around 1,500 m of drilling over nine holes. There are still plenty of untested targets on the site, and Riverside CEO John-Marke Staude said that the company was pleased with the target generation and exploration phase of the option.
Impact Silver (TSXV:IPT, FRA:IKL), a silver-gold explorer-producer in the Zacualpan and Mamatla districts of Mexico, has received the results of re-analysed 1990s geophysics from a contractor, and they’ve identified targets that could potentially expand their Capire project, which includes an open-pit mine. There will be follow-up field work in the summer.